American Outdoor Brands Inc. provided more evidence that demand for guns was stabilizing, with full-year sales and profit guidance that topped analysts’ expectations.
Chief Executive James Debney said Thursday there had been a slight improvement in demand as the industry entered its busiest selling period, including the second-best Black Friday sales on record.
Federal Bureau of Investigation background checks on new sales—an industry proxy for growth—rose 10% in October from a year earlier, the sixth straight month of expansion.
While sales and profits fell in the latest quarter, American Outdoor Brands boosted its full-year outlook for the fiscal year to April 30. Shares rose 4% to $9.80 after hours.
The company’s stand-alone firearms business, to be named Smith & Wesson after a planned split next year from the business that makes accessories like gun sights and hunting knives, still faces broad challenges.
Mr. Debney, the soft-spoken British-born executive who has led American Outdoor for a decade, plans to remain head of the spun-off accessories business.
Walmart Inc. and Dick’s Sporting Goods Inc. are among the big retailers that have restricted the variety of guns and ammunition they sell. Recreational Equipment Inc., one of the largest outdoor-pursuits retailers, temporarily pulled camping and other products made by Vista Outdoor Inc., an ammunition and gun maker that diversified before selling its firearms business this summer.
American Outdoor and rivals are emerging from a period of weak demand. Sales fell to $638 million in its fiscal year through April from more than $900 million three years earlier. Now it expects them to rise to as much as $700 million next year, some $60 million above expectations.
Mr. Debney has said the corporate split will give investors another opportunity to pursue a pure-play firearms company—rival Sturm, Ruger & Co. has largely shunned diversification, citing high valuations of potential targets—or the faster growth rate of the accessories business.
Some analysts said they were skeptical that Smith & Wesson will find much unmet demand at a time when fund managers such as BlackRock Inc. are pushing gun makers to take a bigger role in combating gun violence.
Shareholders at American Outdoor and Sturm, Ruger last year passed measures requiring the companies to prepare annual reports on the illegal use of their guns despite opposition from their boards.
“The pool of investors who can or want to own a pure-play firearms company is much smaller than it was,” said Steve Dyer, co-president of Craig-Hallum Capital Group.
Some industry veterans believe gun makers need to provide the retail market with more support by avoiding the discounting that has driven many stores to close.
Hundreds of gun stores have closed and some big firearms distributors have gone bankrupt in recent years.“The shooting-sports model is broken,” said Miles Hall, a consultant who formerly owned one of the largest gun stores in the U.S., in Oklahoma City.
Gun sales have risen and fallen in recent years as the nation’s 4.5 million firearms enthusiasts stocked up when they believed lawmakers might toughen ownership rules.
FBI background checks on new sales hit a record 15.7 million in 2016 as buyers stocked up ahead of an expected Hillary Clinton presidential win. President Trump’s victory allayed expectations of tougher ownership regulations, and gun sales dropped.
The industry struggled to absorb extra production and embarked on discounting that left sales at American Outdoor flat over the past five years.
Write to Doug Cameron at doug.cameron@wsj.com
Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
"sales" - Google News
December 06, 2019 at 07:30AM
https://ift.tt/2DMVEXt
Smith & Wesson Parent Sees Higher Gun Sales - The Wall Street Journal
"sales" - Google News
https://ift.tt/2Y6RbrS
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
Bagikan Berita Ini
0 Response to "Smith & Wesson Parent Sees Higher Gun Sales - The Wall Street Journal"
Post a Comment